Moving to direct deposits

The Treasury Department is facing a March 1 deadline to get millions of people who still receive their benefit payments by mail to convert to electronic delivery.

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By Michelle Singletary

recordnet.com

By Michelle Singletary

Posted Jan. 16, 2013 at 12:01 AM

By Michelle Singletary
Posted Jan. 16, 2013 at 12:01 AM

» Social News

The Treasury Department is facing a March 1 deadline to get millions of people who still receive their benefit payments by mail to convert to electronic delivery.

Affected are those receiving Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board or Office of Personnel Management benefits and other non-tax federal payments. The government has been gradually phasing out paper checks to save money. It costs 92 cents more to issue a paper check than electronically depositing the benefit money.

You can sign up for direct deposit or the "Direct Express" debit MasterCard by calling (800) 333-1795. You can also sign up online by going to godirect.org. With the debit card, you can make purchases, pay bills and withdraw cash at ATMs. Starting in 2011, anyone newly applying for federal benefits had to choose to get their money in one of these ways.

The debit cards are issued by Comerica Bank. There are no fees to sign up. There are also no monthly fees or overdraft charges. And you don't have to go through a credit check to enroll.

People using the card only get one free withdrawal per deposit of federal funds. And to get that one free withdrawal, you have to use specific ATMs in networks associated with the Treasury program. There are more than 50,000 such ATMs nationwide. You can locate the nearest ATM where you won't be charged for the first free withdrawal by going to usdirectexpress.com. At the bottom of the home page, click the link for "ATM Locator."

If you exceed the one withdrawal, it will cost 90 cents, and this does not include a surcharge that may be levied by the ATM owner. At the very least, people ought to be allowed up to three or four free ATM withdrawals a month.

In 2011, 440,000 Social Security and Supplemental Security Income checks were reported lost or stolen. In the same year, $70 million Treasury checks were fraudulently endorsed. You are 125 times more likely to have a problem with a paper check compared with an electronic payment.

Regardless of whether you're afraid or just procrastinating, you don't have to worry that you won't get your check if you don't meet the March 1 deadline. You have to sign up for direct deposit or the debit card before your paper checks stop.

About 93 percent of the benefit payments are now being made electronically, and getting the remaining paper check recipients to convert to electronic payments will save the government $1 billion over the next 10 years, according to the Treasury Department.

Treasury will grant waivers from the electronic mandate for certain people. Automatic waivers are granted to people born on or before May 1, 1921. And you can ask for a waiver if you live in a remote area that does not support electronic payments.

Contact Michelle Singletary, a personal finance columnist at The Washington Post, at singletarym@washpost.com.